Wage costs grow in Britain amid record high employment rates

Wage costs in the UK grew 1.7 per cent in the fourth quarter of 2018 from the quarter before, compared to an average of 0.5 per cent quarter on quarter growth over the last 10 years.

Wage costs per hour worked in Britain – meaning benefits in kind, wages and salaries – were 3.2 per cent higher in the fourth quarter of 2018 than a year earlier, compared to an average year on year growth figure of 1.7 per cent over the last decade, data released today by the Office for National Statistics (ONS) showed.

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The real estate industry saw the highest growth, with seasonally adjusted wages 5.1 per cent higher in the last three months of 2018 than the three months before. They were 4.8 per cent higher in the electricity, gas, and water supply industry over the same period.

At the other end of the table was administrative and support services, where wage costs decreased by 0.5 per cent between the third and fourth quarters of 2018. Over the same period, metals manufacturing wages fell by 0.3 per cent.

Electricity, gas and water supply saw the biggest year on year increase in wage costs in the fourth quarter of 2018, at 10.3 per cent. In contrast, wages in chemicals and man-made fibres manufacturing were 5.3 per cent lower compared to a year earlier.

Overall wage cost increases are in line with expectations for an economy with record levels of employment.

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The UK’s chancellor Philip Hammond used last week’s Spring Statement to praise “Britain’s remarkable jobs story”, saying the Office for Budget Responsibility had revised up yearly wage growth predictions to three per cent or higher for the foreseeable future.